Banks like Wells Fargo and Bank of America are heavily skewed toward the sunny, once-fast-expanding states of California and Florida. But those states now may prove a drag on growth, if their economies stagnate because of protracted fiscal problems and burned-out housing markets.

One bull argument for Wells and BofA is that their big credit-crisis acquisitions have expanded their franchises. But the deals did little to reduce the weighting of California and Florida in their loan books. Wells got more East Coast loans buying Charlotte, N.C.-based Wachovia, but that bank had loaded up on California mortgages by acquiring Golden West Financial.

BofA provides probably the best state-by-state loan disclosure. California accounts for 25.8% of a $600bn (€443.9bn) sample that includes first-lien mortgages, home-equity loans, credit cards and other consumer loans. Florida accounts for another 8.5%, giving a combined total of more than 34%.

In its latest quarterly filing, Wells gives only specific-state breakdowns for commercial real-estate and home-equity loans, and one type of adjustable-rate mortgage. Of this $350bn pool, California has 32% and Florida 10%, a whopping 42% combined. At JP Morgan Chase, Florida and California account for only 24% of $440bn of loans to individuals.

Geography matters. History shows states can slip into long-term underperformance. From 1991 to 2008, Pennsylvania and Ohio posted average annual growth-domestic-product growth of 2% and 1.7%, respectively, well below the 2.8% national average.

Of course, California and Florida have expanded faster than the rest of the country, and could rebound again. But above-average growth looks harder now. Fiscal shortfalls present a serious challenge, especially in California. Deficits can mean higher taxes, potentially deterring businesses from locating there. Combined with deep cuts in education and infrastructure, that also can scare off individuals. Florida is in better fiscal shape, but its economy lacks California's diversity, and its housing market looks particularly stricken.

If these two states wallow, banks still can expand by taking market share. Or they can ramp up in smaller states that could experience higher growth. BofA says it operates in 12 of the 15 states projected to have the highest growth in households from 2008 to 2013. However, two of those are Florida and California.

This leaves Texas. Its economy, the third largest after California and New York, has long outperformed, even through the recession. Yet, looking at the loan pools for which banks give state breakdowns, BofA has Texan exposure of only 4.6% and Wells 3.5%. J.P. Morgan looks best-positioned, at 7%.

The sun isn't always cruel.

Write to Peter Eavis at peter.eavis@wsj.com
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